Kibodeaux Corporation makes a product with the following standard costs: The com
ID: 2445400 • Letter: K
Question
Kibodeaux Corporation makes a product with the following standard costs:
The company budgeted for production of 3,300 units in June, but actual production was 4,000 units. The company used 38,800 liters of direct material and 380 direct labor-hours to produce this output. The company purchased 35,640 liters of the direct material at $5.10 per liter. The actual direct labor rate was $28.70 per hour and the actual variable overhead rate was $8.70 per hour.
The company applies variable overhead on the basis of direct labor-hours. The direct materials purchases variance is computed when the materials are purchased.
The labor rate variance for June is:
$280 U
$266 F
$266 U
$280 F
Kibodeaux Corporation makes a product with the following standard costs:
Explanation / Answer
Labor rate variance = (Actual Rate-Standard Rate)*Actual Hour
Labor rate variance = (28.70- 28)*380
Labor rate variance = $ 266 Unfavorable
Answer
$266 U
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